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Strategy

The hardest part of Business Strategy

A strategy is about problem-solving. It is a coherent thesis that backs up a clear direction and effective action-taking.

The combination of these aspects implies that choices are made, which in turn means that you get to do some things, while you decide to not do some others.

This is called focus.

The hardest part is the focus

In the past years, it has become commonplace to dismiss strategy work as paperwork combined with hefty presentations. While this is often the case, it is more a symptom than a disease.

While it coming up with a sound strategy is something most companies can do, being able to execute it properly, however, is a completely different story. The reason behind that usually falls in the same place:

Not being able to decide on what to focus and consequently execute on it.

Focus is hard

Focus is hard. Focus means that you have to make choices. More than that. It means that you have to act on these choices. It means saying yes to some things and no to many others.

Having focus will not allow you to be the people pleaser most of us are. It will require you to kill that project your team loves! And sometimes, push for that one where there’s not a lot of hype around.

Focus is really hard and requires trade-offs.

Focus requires trade-offs

It should be obvious by now that working on the trade-offs is the bread and butter of strong strategies, right?

When Steve Jobs came back to Apple the company was on the verge of bankruptcy. It had a huge line up of computers, peripherals and all sorts of accessories because, of course, that was what the market asked for.
In one year he cut the desktop line from 15 computers down to only 1. The supplier list was reduced by 80% and the distributors were reduced to only 1.

These are real trade-offs and a strong show of regaining focus. But more than that, it allows the company to focus on what really matters.

After that, the company was able to build a web store to sell directly to consumers. Apple also moved its manufacturing to Taiwan and ruthlessly cut inventories by 80%.

The sum of all these measures not only saved the company from the impending doom. It also paved the way–by providing breathing room and cash flow–for the drastic innovations that followed closely after, starting with the launch of the iPod and iTunes store.

Look closely and you will see that the benefit came not when Steve Jobs convinced the board they needed to focus, not when the whole management team nodded in agreement, much less when he sent a company-wide communication that something would happen.

Things only moved when execution really happened and management walked the talk.

Focus is execution

No strategy survives poor execution.

It does not matter if your company has the best strategy brains in the world designing your next strategy. If your management is going to undercut your company is doomed just the same.

This is the hardest part of the hardest part.

It is one thing to agree on the focus. It is a whole other ballgame to execute it. To resist all temptations to run just another small thing on the side. To say no to all your favorite projects, initiatives, products and, in some cases, people.

However, this is what separates companies in the end:

Having the ability to do a thorough problem-solving exercise to identify the core of your strategy, design a coherent set of goals and actions and ruthlessly focus your energy and resources on the ones that matter is what really sets companies and teams apart.


Jorge

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